The Market Today

Quiet End to Another Historic Year


by Craig Dismuke, Dudley Carter

TODAY’S CALENDAR

There are no economic reports on today’s calendar.


CORONAVIRUS UPDATE  Vining Sparks Coronavirus Chartbook and Vining Sparks Coronavirus State Charts

CDC Sinks Cruise Stocks: Ontario announced new restrictions to address Omicron’s spread but reduced the recommended isolation period for vaccinated citizens that contract the virus to five days. The recommendation for the unvaccinated who become infected was unchanged at 10 days. Both Ontario and Israel said they would offer fourth doses of vaccines to certain vulnerable people. The FDA will reportedly allow 12- to 15-year-olds to receive a booster dose of the Pfizer vaccine. Ruining a solid day for cruise line stocks, the CDC raised its travel guidance for cruises to the highest level and warned against boarding a ship, regardless of one’s vaccination status.


TRADING ACTVITY

Late-Session Selloff Prevented Equity Records, Treasury Yields Fell Flatter: A late-session selloff Thursday ended the Dow’s recent winning streak and prevented the S&P 500 from notching its 71st record of the year. The major indexes had opened higher following gains across Europe and traded in positive territory until the final half hour of trading. Jobless claims data released before the market opened showed an unexpected decline for new filings and a new pandemic-era low for continuing claims. However, the indices pulled back around 3:30 p.m. CT and losses gathered steam into the close. The Dow and S&P 500 both slipped 0.3% after record finishes Wednesday while the Nasdaq edged 0.2% lower. The S&P 500’s energy and tech sector led losses across most sectors while the safer real estate and utilities plays rose. Among the day’s storylines, cruise stocks fell sharply from intraday highs after the CDC advised against boarding the ships. Treasury yields were already flattening lower but made new lows as equities retreated late. For the day, the 2-year yield slipped 2.2 bps to 0.72%, the 5-year yield fell 3.4 bps to 1.26%, and the 10-year yield settled down 4.1 bps at 1.50%.

Quiet End to Another Historic Year: Sparce weekly trading volumes fell even further Friday as many markets were closed entirely or called it quits early as the world prepares to welcome in a new year. Equities rose in China and Hong Kong after China’s manufacturing and non-manufacturing PMIs rose unexpectedly to close out 2021, with modest gains lifting the indices to 50.3 and 52.7, respectively. Faring worse than most other regions, the MSCI Asia Pacific equity index declined by more than 3% in 2021. Europe’s Stoxx 600 slipped 0.1% Friday as most national markets shutdown after a half day but ended the year up more than 22%. U.S. equity index futures were also down by around 0.1% shortly after 7 a.m. CT but the majors were on pace for solid annual gains. Through Thursday, the S&P 500 led with a 27% rally, the Nasdaq gained more than 22%, and the Dow was up nearly 19%. Treasury yields were marginally lower beyond five years amid the low-volume session for global sovereigns. As of 7:40 a.m., the 2-year yield had risen 61 bps on the year, the 5-year yield had added 90 bps, and the 10-year yield was 59 bps higher than where it ended 2020.


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